Is Your Lifestyle Killing Your Finances?
As life progresses, some are fortunate enough to see their earnings increase. Often times as income increases, lifestyle continues to progress, eating up much of this increased income and more. This cycle leads many American’s down a spending path that does not allocate enough money toward long term retirement saving. A recent Hewitt Associates survey of 401k participants estimates that only 17% are on track to save enough to fund their retirement. (http://aon.mediaroom.com/2013-10-30-Aon-Hewitt-Survey-Finds-Employers-Boosting-Efforts-to-Help-Workers-Save-for-Retirement) What about the other 83%?
One of my favorite books is The Millionaire Next Door by Tom Stanley and William Danko. This book was written in 1996, and its principles prove themselves to be right on point time and time again. The book interviewed a selection of millionaires and found that those with real wealth did not put their money into flashy homes, cars, jewelry, vacations, etc. They lived a comfortable lifestyle but felt that those types of purchases were a waste of money that would not help them financially in the long run. They invested in their futures by saving. Unfortunately, most Americans are doing just the opposite.
This retirement saving shortfall is further hindered by 8 years of the government printing $7,000,000,000 - $8,000,000,000 of money. Because of this, a million dollars of retirement savings is not what it used to be. Add to that longer life spans, and it indicates that America really has a retirement savings predicament. If you have any questions about any of the information above, or want to assess your retirement savings projections, I’ll be glad to talk to you about it. If you would like to read more about my favorite book, The Millionaire Next Door, click on either one of the links below: